Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Exide Technologies

One earnings short-squeeze play in the industrial goods sector is Exide Technologies ( XIDE), which is set to release numbers on Thursday after the market close. This company is a provider of stored electrical energy solutions, and is a manufacturer and supplier of lead-acid batteries for transportation and industrial applications worldwide. Wall Street analysts, on average, expect Exide Technologies to report revenue of $750.48 million on earnings of 8 cents per share.

If you're looking for a beaten-down heavily shorted smallcap stock ahead of its earnings report this week, then make a sure to check out shares of Exide Technologies. This stock has plunged off its February high of $4.15 to a recent low of $2.25 a share. That move has pushed the stock right near its 52-week low of $2.22 a share.

The current short interest as a percentage of the float for Exide Technologies sits at 8.3%. That means that out of the 68.02 million shares in the tradable float, 6.21 million shares are sold short by the bears. This stock could see a decent short-squeeze this week if the company can report solid earnings and raise forward guidance.

From a technical perspective, XIDE is currently trading below both its 50-day and 200-day moving averages, which is bearish. For the past four months, shares of XIDE have been stuck in a nasty downtrend. During that downtrend, this stock has consistently made lower highs and lower lows, which is bearish technical price action. That move has also pushed XIDE into oversold territory, since its current relative strength index is showing a reading of 39.44.

If you're bullish on XIDE, I would look for long-biased trades if after they report it manages to trigger a breakout above some near-term overhead resistance at $2.45 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 575,314 shares. If we get that action, then XIDE could easily take out its 50-day moving average of $2.71 a share if the bulls gain full control of this stock post-earnings.

I would simply avoid XIDE if after earnings the stock fails to trigger that near-term breakout and then drops back below some major near-term support levels at $2.30-to-$2.25 a share with heavy volume.

If you liked this article you might like

Market's Post-'Clexit' Behavior May Yield Value Entry Points

5 Hated Stocks You Should Love This Earnings Season

5 Stocks Under $10 Set to Soar